BILL ANALYSIS Ó
AB 2564
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Date of Hearing: May 11, 2016
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Lorena Gonzalez, Chair
AB
2564 (Cooper) - As Amended April 20, 2016
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Urgency: No State Mandated Local Program: NoReimbursable: No
SUMMARY:
This bill requires the California Air Resources Board (ARB), in
consultation with the California Energy Commission (CEC), to
adopt regulations to establish eligibility for the Clean Vehicle
Rebate Project (CVRP) based on income levels. Specifically, this
AB 2564
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bill:
1)Increases rebate amounts by $500 per rebate for consumers with
household incomes less than or equal to 300% of the federal
poverty level. Increased rebate amounts are available for
fuel-cell electric vehicles, battery electric vehicles, and
plug-in hybrid electric vehicles.
2)Limits CVRP eligibility to income of $125,000 for single
filers, $170,000 for head of household, and $250,000 for joint
filers. Excludes fuel cell electric vehicles from the income
limit.
3)Requires outreach to low-income households and prioritizes
rebate payments for low-income consumers.
FISCAL EFFECT:
1)Increased initial costs of $150,000 to $250,000 (Air Quality
Improvement Fund) per year for two years for ARB to adopt
regulations to implement CVRP eligibility modifications and
prioritizations.
2)Unknown, future and ongoing costs for ARB to update the CVRP
program by regulation to reflect current market conditions.
3)Unknown, increased costs for ARB to provide outreach to
low-income households.
COMMENTS:
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1)Purpose. This bill implements recommendations from an ARB
discussion document. These recommendations include increasing
awareness about CVRP by requiring outreach in disadvantaged
communities and prioritizing rebates payments for low-income
consumers. This bill goes beyond ARB recommendations and
increases rebates for consumers with household incomes less
than or equal to 300% of the federal poverty level.
Additionally, this bill lowers the CVRP income limits to
$125,000 single filer, $170,000 for head of household, and
$250,000 for joint filers.
2)Background. In 2007, AB 118 established three new programs
intended to promote vehicle and fuel technology that reduces
air pollution and GHG emissions statewide. These programs are
the Air Quality Improvement Program (AQIP), the Enhanced Fleet
Modernization Program (EFMP) and the Alternative Renewable
Fuel and Vehicle Technology Program (ARFVTP).
AQIP provides financial incentives for public and private
groups and individuals to adopt smog and diesel particulate
pollution reducing technology that concurrently reduces GHG
emissions. Two of AQIP's flagship projects, CVRP and the
Hybrid and Zero Emissions Truck and Bus Voucher Incentive
Program (HVIP) represent the program's largest funding
commitments. AQIP has also provided incentives for biofuels
research, hybrid truck testing, lawn and garden equipment
replacement, zero-emission all-terrain agricultural work
vehicle rebates, advanced technology demonstration, and hybrid
off-road equipment pilot projects. CVRP provides rebates for
ZEV and NZEV, including plug-in hybrid vehicles, battery
electric vehicles, fuel cell electric vehicles, and
neighborhood electric vehicles.
The demand for CVRP has steadily increased over time and
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surpassed funding available through AB 118. Originally, the
funding gap was covered with loans from various funds. In the
2014-15 Budget Act, $200 million was appropriated to AQIP from
the GGRF. Last year, CVRP was one of the few non-continuously
appropriated programs to receive an appropriation from GGRF.
Despite that, CVRP may still run out of funding prior to the
enactment of this year's budget, and the administrator may
need to establish a wait list.
To date, CVRP has spent over $300 million ($160 million from
AB 32 cap-and-trade revenues) to provide over 142,000 rebates.
ARB proposes to spend an additional $230 million on CVRP from
the $500 million requested appropriation for low carbon
transportation and fuels in the Governor's 2016-17 fiscal year
budget.
3)Recent Legislation. As CVRP expenditures have grown, there
have been concerns about the equity of the program and its
cost effectiveness. These equity issues were recognized when
the Legislature passed SB 1275 (de León), Chapter 530,
Statutes of 2014, which established the Charge Ahead
California Initiative to increase access to ZEVs and NZEVs for
lower income Californians and disadvantaged communities. SB
1275 also required eligibility to be limited based on income.
In response to SB 1275, ARB, on March 28, 2016, set an income
cap of: a) $250,000 for single filers; b) $340,000 for
head-of-household filers; and c) $500,000 for joint filers.
Additionally, rebate amounts will be increased by $1,500 per
rebate for consumers with household incomes less than or equal
to 300% of the federal poverty level. This bill modifies both
the income eligibility and rebate amounts established by SB
1275.
AB 2564
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Analysis Prepared by:Jennifer Galehouse / APPR. / (916)
319-2081